Future role of API in product innovation platforms

In software application programming interface (API) is a set of routines, protocols and tools to build a software. An API expresses a software in terms of how it works, data input, functionality and rules. A good API can serve as an abstraction level in every software product.

For many years of CAD and PLM development, API served as an internal protocol used by (usually small) number of partners and internal developers. Few companies did a great job providing open API and maintaining for long period of time. More often API was a way to protect a specific set of functionality – not everything you can do in a product can be done with APIs.

In the early days of PLM systems, API was an important element of the system – PLM was sold as toolkit and companies were doing significant development using these APIs. Later on, companies moved into OOTB (out-of-the-box) approach and the role of API was compromised.

These days PLM vendors are insisting on differentiation between customization and configuration of PLM systems. The first assumes coding and requires API. The second is a glorified name for the approach to use menus and tools to “configure” the system without coding.

So far, API seems to be dead for PLM vendors that are afraid of complexity in PLM deployment. It is better to rely on tools and menus without configuring and developing your product.

Modern web platforms are bringing change in the status quo of API development. These days APIs are becoming an important element in business and community building. Software is eating the world and developers are starting to play even more important role in this world than before.

TechCrunch article Almost everyone is doing the API economy wrong speaks about how modern platforms are using API. And it is not only about Google an Facebook. It is about Uber, Lyft, Walgreen and many other online platforms. Article brings few interesting examples how API was used to leverage business opportunities in a better way. Here is an interesting passage:

The closed-API model ends up missing the big opportunities because, unlike the “Biz Dev 2.0’’ approach of APIs, it relies on hand-crafted partnerships that inevitably try to pick winners and losers before a line of code has been written by quickly becoming about things like exclusivity and co-marketing. In many ways, not thinking through API monetization is even worse, because it doesn’t provide sustainable incentives and rewards to either the API provider, the developer or the user.

Uber’s new Trip Experiences API is a much better option because it lets developers pursue in-ride and post-ride monetization opportunities. One thing I’d recommend to Uber is to make sure they’re figuring out the best way to manage the ecosystem of developers who build upon this, much as Facebook did with their developer program.

Walgreen’s successful Photo Prints API as a great example of a traditional business that has embraced the API economy. The photo app category is a crowded space, with lots of developers finding new ways to make it easier to take and edit great photos. Walgreens’ API gives developers a way to monetize their apps by earning commissions on each photo printed to a local Walgreens store location.

So, what does it mean for CAD, PLM and future Product Innovation Platforms? I think PLM vendors should get back and rethink their API stories. Platforms should be open and API will become a monetizing mechanism for platforms to bring more developers, services and improve the experience. Open API access to product information can help to develop online services that interlink with other services (examples – supply chain catalogs, 3D printing orders, etc.).

What is my conclusion? API can play an new role in the future of product innovation platforms. Moving from the “functionality tweaking” approach, API is a business enabler and technological layer to deliver online services. CAD and PLM companies should think how to bring more developers to their platforms to build additional business services. Just my thoughts…

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